Category Archives: Business

And the Hits Just Keep Coming

1 Reply

Reynolds American is laying off 570 people and proving that its executives can mumbly-speak with the best of them:

“As we invest in growth to expand the business base of our operating
companies to innovative new tobacco products, we continually review our
plans to support that strategy and to strengthen performance in a
changing marketplace,” said Susan M. Ivey, RAI’s chairman, president
and chief executive officer."

and

“Continued success demands that we fully align our plans, programs and
people behind the things that matter most to our future performance,”
said Daniel M. Delen, chairman, president and chief executive officer
of R.J. Reynolds. “The steps we are taking support R.J. Reynolds’
ongoing evolution to a ‘total tobacco’ business model that includes
both cigarettes and innovative smokeless tobacco products."

I don’t know squat about what’s going on day-to-day in Reynolds, and maybe they absolutely have no choice but to cut jobs, but for once I’d like to hear an American executive say that they realize that 570 of their people, the people who helped put them in their big house and nice car, are now scrambling to find a way to pay the bills, and it is at least in some part due to the executives’ job performance that these people are being put on street.

What really disturbs me about this is that I don’t get the sense that this is a "survival" move by Reynolds, but more a "we need to keep our profits up to satisfy shareholders" move.  I mean this is a company that reported the following net income over the last four years:

  • 2004 – $688 million
  • 2005 – $1.04 billion
  • 2006 – $1.21 billion
  • 2007 – $1.31 billion

Reynolds is no different than almost every other public company out there.  The number one priority is doing whatever it takes to please the shareholders, and executives are compensated based on how well they do that.  Still, it would be nice to see at least one Fortune 500 company put its people first and take a short term financial hit in an effort to build long term health for the company and its people.  And if that’s not possible then it would be really refreshing to see an executive take a personal hit in acknowledgment of the fact that they are directly responsible for some of their people losing their livelihoods. 

When is the last time you heard of an executive of a public company taking a pay cut in order to help save jobs?  I sure hope someone can give me an example that I just haven’t heard of, but in my mind I’m thinking of the execs at Citi and Merrill Lynch who steered their companies from incredible profitability to massive losses and parachuted out with severance packages that Midas would envy.  I’m also thinking about Delphi’s executives feathering their nest while also saying that they could save the employees’ pension plan if the union members would agree to working for about a third of their old pay. I could go on, but then this post would be interminably long.

I love business and I love free markets, but I also think that just because markets are free doesn’t mean that businesses and the people who run them are relieved of a moral obligation to their people and communities.  The standard line from executives during layoffs is that their job is to look out for the best interest of the company, and by extension its stakeholders.  While layoffs might be bad news for some it is better news for everyone else because the company will prosper and take better care of the majority.  My response is that in cases where the company is about to go belly up and you have to drop 50 in order to save 100, then maybe so.  But when a company is profitable and the only gain in dumping the employees is becoming more profitable, well then that is simply immoral.  It shows a lack of leadership, a lack of ability to find a way to help employees adjust to the new strategic direction, an inclination to take the easy road.  In short it shows executives to be short-sighted, self interested yellow bellies.

I can only hope that when the executives who make these decisions sit down to dinner with their families,  they will think about those people whose sweat helped put that dinner in front of them and who now face a struggle to put their own dinner on the table.  And if they do think about that then maybe they’ll think about foregoing a raise or a performance bonus, or maybe they will redirect that money to a program that will help place those lost employees with another company.

I’m not holding my breath.

Winston-Salem Chamber of Commerce Insults Our Intelligence

3 Replies

On the front page of today’s Winston-Salem Journal there’s an article titled "Groups Lobby City for Break"
and the thrust of the article is that the Chamber and the local realtors and developers are asking the city for a moratorium on new development regulations.  From the article:

Winston-Salem should impose a moratorium on any new business
regulations, including a proposed tree ordinance, because of current economic conditions, say the Greater Winston-Salem Chamber of Commerce,
real-estate agents and homebuilders.

The chamber’s request, sent to the city last month, says that
Winston-Salem has enacted too many ordinances in recent years that add
to the cost of doing business. The letter specifically mentions
ordinances that affect sidewalk and street standards, storm-water
regulations, sign regulations and even an ordinance that requires
business owners to remove graffiti.

Okay, I understand that the Chamber’s job is to advocate for businesses in the city so I don’t begrudge it the position it’s taking.  It’s a later paragraph that they use to help justify their position that just blew my mind:

The number of zoning cases coming before the planning board is down
about 50 percent from last year, a measure that the chamber says is
evidence, in part, of "the difficulty doing business here."

What?  The Chamber wants us to believe that adding sidewalks and other such regs are going to keep developers from building?  I have to call "BS" here, because developers build anytime they think there will be a buyer.  You could require them to plant 100 pink ceramic elephants on every acre and they’d do it if they thought they’d have a buyer.  No, I’m thinking that perhaps our country’s epic housing decline and credit crisis might have just a little to do with the decrease in zoning cases.  Heck, Paul Norby, the director of the City County Planning Board, says exactly that in the article.

Like I said, I have no problem with the Chamber doing what they think is in the best interest of their members, but they should at least assume that the good citizens of Winston-Salem aren’t all a bunch of dumbasses and refrain from condescending arguments such as this.  And if nothing else they should realize that it makes them look like they’re the realtors’ and developers’ lap dogs, which they may very well be. 

BTW, I joined the Chamber last year and unfortunately I’ve only been able to make an event or two due to the fact that all the events seem to conflict with other obligations.  They did a wonderful job of outreach to me when I joined and it’s through no fault of theirs that I haven’t been able to do more with them.  I’m hoping to get more involved over the next couple of months.  On the other hand, I often find myself disagreeing with their public policy initiatives so I’m thinking they may not like having me around if I start piping up on the issues and letting them know what I think about many of their government affairs positions.  I don’t think that will win me the Dale Carnegie "How to Win Friends and Influence People" prize.

Guaranty This

Leave a reply

Now is not the time to be in the guaranty business, especially here in the NC Piedmont.  First, Triad Guaranty said they were throwing in the towel and more recently posted a nasty loss for the second quarter, and now AIG’s underwriter United Guaranty has declared a $564 million underwriting loss for the 2nd quarter of this year.  United also said that 4.9% of policies were over 60 days past due.

Oy.

PaidContent Bought

Leave a reply

Back in
early 2002 I was working for a b-to-b publisher in Washington, DC and
was very tired of the commute in and out of the city.  I decided to go
out on my own as a consultant and my first client was MarketingSherpa, which had been launched by Anne Holland not too long before that.  At the same time PaidContent.org was launched by Rafat Ali and since they were in similar businesses the two companies bumped into each other on occasion.

PaidContent was more of a "newsy" operation while MarketingSherpa
was more of a "how-to" for marketers.  I haven’t talked to Anne in
years, but by outward appearances MarketingSherpa is doing very well
and I think she’s built a sustainable business based on email
newsletters that are free (content is put behind a firewall after a
couple of weeks, so it must be purchased if you want to see it after
that), and then selling premium content like reports and events to the
large base of free subscribers.  From what I can tell PaidContent went
more in the direction of ad sales as a revenue stream, although they
also sell ads and host events, and they too seem to be doing very
well.  So well, in fact, that PaidContent is being purchased by the Guardian Media Group out of the UK.

Nice to see all the hard work has paid off for Ali and his crew, and
I’m also glad to see Anne continuing to do so well.  They also have
shown that there’s more than one way to skin a cat in the online media
world.

100 vs 70

Leave a reply

I’m in San Diego to attend a conference being held at the Loews Coronado Bay Resort.  It’s a great location any time, but when the temp outside is 70 with a gentle sea breeze and the temp back home is closing in on 100 with that lovely North Carolina humidity it’s even better.  Thankfully the conference organizers have scheduled some form of networking event on the terrace each day so we don’t spend all of our time in windowless meeting rooms.

BTW, it’s a lot more fun to attend a conference than to organize/run one.  My company’s a sponsor of the event, but the way the conference is structured we aren’t stuck in an exhibit booth like at other events. We’re expected to participate in the interactive sessions and we’re invited to participate in all networking events.  Makes for long days, but considering how many truly interesting and smart people I’ve met it’s definitely a great experience.

Conference link: Frost & Sullivan’s 4th Annual Innovations in New Product Development and Marketing 2008

Why RJ Reynolds Should Be the Biggest Arts Sponsor in the US

Leave a reply

Winston-Salem is the home to both RJ Reynolds and the North Carolina School of the Arts.  Until now this seemed just a coincidence to me, but now I think the folks at RJR may have seen the future decades ago and worked behind the scenes to make sure the NCSA came to Winston.  Here’s why: to get around smoking bans in liberal states like California and Minnesota bars are starting to have theater nights. It seems that in these states actors are allowed to light up during live performances, and so bars are staging plays and calling all the patrons actors.  Nifty!

Here’s a piece about the smoking ban work-around on Boing Boing, and the article they link to in The Star Tribune, the newspaper of record in those other Twin Cities in Minnesota.

I’m thinking that RJR’s marketing folks need to get hyper aggressive in promoting bar-plays AND their lobbyists need to get busy making sure this loophole doesn’t close any time soon.  To push bar-plays they should print and distribute free of charge every play that features multiple characters sucking on cancer sticks.  Better yet they should commission students at NCSA to write plays in which every character smokes and have multiple crowd scenes.

And while they’re at it why stop with bars?  They should see if this work-around applies to schools.  Those kids are always doing plays and I keep hearing how those commie-educators are constantly cutting back on arts programs so school plays offer a perfect opportunity for business/education synergy.

This’ll show those rubes at truth who’s in charge.

Disingenuous About Men

4 Replies

There’s an agency here in Winston-Salem called Frank About Women and they specialize in, yep, marketing to women.  I’m thinking that when I launch my agency it should be called "Disingenuous About Men" because, well, isn’t it obvious?  Here’s a couple of blurbs from the Frank About Women home page:

We are skilled at transforming cultural knowledge into gender-savvy marketing programs.

We are immersed in the beliefs, behaviors and evolving expectations of women.

I think my blurbs would read:

We know what men want, but then who doesn’t?

We have stock photos of lots of nubile women. What do you want us to put them on?

I’m gonna be rich!

Knight Topline Services…Hey, I Know Her!

Leave a reply

Reading the Winston-Salem Journal’s business section this morning I came across this article about Knight Topline Services which included these paragraphs:

The Winston-Salem
heating and air-conditioning company’s bright-orange trucks and vans,
for example, were painted that way to stick out among all the white
heating and cooling vehicles owned by its competitors in the market.

Stacey Musco, the
company’s vice president of marketing and promotions, came up with the
idea to add knights on horses emerging in black and white on the
vehicles, along with the company slogan: “Let our knights slay your
energy dragons!”

Stacey (Motsinger) Musco is my cousin and this is one more piece of evidence in support of my claim to the title as the family’s biggest slacker.

Home Office Fun

Leave a reply

Working out of a home office has some definite upsides and downsides.  The upsides include not having to shave every day and working in sweats.  The largest downside is being your own tech support.  Take this morning (please)…I get up to my office and find that I cannot get to my email or get my browser to "find" the web.  Strangely my VOIP (Vonage) phone works and I can access my client’s VPN (virtual private network).  To rectify my situation I resort to all my old tricks:

  1. Re-boot the computer.  No joy.
  2. Unplug the modem/router for a couple of minutes.  No joy.
  3. Unplug the modem/router and the Vonage converter for a couple of minutes.  No joy.
  4. Re-boot and unplug everything for a couple of minutes.  No joy.
  5. Start cursing. No joy, but some relief.

I run down to Celeste’s office to see if she can connect.  No problemo for her, so that means that the problem’s with my PC.  Using her computer I Google my issue and get some tips involving manually resetting DNS’s, pinging and other nefarious and hideously technical actions.  I continue cursing.

Upon returning to my office I decide to plug the cable from my router directly into my computer, thus bypassing Vonage.  Voila I’m online.  Still haven’t totally resolved the issue, but hopefully I’m getting close.

Still cursing.

Good PR Through Good Deeds

Leave a reply

Local graphic design firm PAVE Creative Group is getting some good PR mileage out of its sponsorship of the Bikes for the World event on November 10, 2007.  They received some notice in the local press, a mention in Smitty’s Notes Winston-Salem’s best resource on local happenings, and they just earned a nice mention on what I suspect is Winston-Salem’s most read blog, Life in Forsyth.

Businesses have long known that they can do well by doing good, but
to really do it right a company needs to make sure that its
philanthropic effort is structured properly.  PAVE affiliated itself
with an organization that is doing something unique (collecting
bicycles for developing countries), aggressively communicated their
program (Esbee shot a picture of PAVE’s poster in a local store) and
worked with other local groups like the Wake Forest cycling team and Simplyummy
to pull off the event.  In other words they treated it like any other
marketing effort which benefits them, their partners and most
importantly the people they are trying to help.  Well done.

Full disclosure: Chris Patti, one of PAVE’s principals, is a friend of mine.